Section 408.43c. Financial, loss experience and liability exposure analysis; notice of denial or termination.

c. (1) The bureau may decline to approve an application for, or may terminate the self-insured authority if an employer is unable to demonstrate a position of reasonable solvency and the ability to pay benefits as prescribed in the act. The bureau analysis of each nonpublic employer application shall include a review of the employer’s financial  position and operating results.

Standard financial ratio analysis and comparison   to  similar  industry statistical data will be considered in the financial position analysis. Other information relevant to the applicant’s financial ability, including but not limited to the following, will be considered:

(a)   The historical operating results.

(b)   Evaluation of financial trends.

(c)   Banking relations.

(d)  Contingent liabilities.

(e)   Pending litigation.

(f)  Corporate guaranties.

(g)   Management team continuity and experience.

(h)   General and specific industry economic conditions.

(i)   Legal structure.

The bureau’s analysis of the employer’s loss experience  and  liability exposure shall include but is not limited to the following:

(a)   Claims for not less than 3 policy years broken down by  paid,  reserve, and total incurred amounts.

(b)   Number of employees.

(c)   Payroll code classifications.

(d)   Excess liability insurance policy terms will be required and considered in the determination of financial ability.

(2)   The bureau shall mail notice of a denial or termination of self-insured authority to the employer. The notice shall include the grounds for denial or termination. The employer may request a hearing in accordance with section 418.611(5) of the act and R 408.43n.

History: 1980 AACS; 1998-2000 AACS.